Towers Watson Says Asia Pacific Firms Up Spending in HR Tech, Mobility and Cloud One-third of respondents plan to spend more on HR technology in the coming year

General Press Releases Monday October 27, 2014 10:44
Bangkok--27 Oct--Spark Communications

Companies across the Asia Pacific region are planning to increase investment in Human Resources technology, HR portals and software-as-a-service (SaaS) systems, via cloud and mobile applications, during the next few years as they seek greater efficiencies, better processes and to raise skills levels within the HR function, according to an annual survey by global professional services company Towers Watson (NYSE, NASDAQ: TW).

The survey also found that one in three companies plan to change their HR structure in an effort to improve both efficiency and quality, reflecting an ongoing drive to get more value out of the function. Improving line managers’ people management capabilities was cited as the top priority for HR departments in the region during the past 18 months, during which adoption rates for manager self-service tools grew significantly.

The 2014 HR Service Delivery and Technology Survey, a global survey of 1,048 companies, including 523 based in Asia Pacific, found that one in three respondents (33%) plan to spend more on HR technology in the coming year compared with the previous year. This includes 23% of companies that plan to increase spending by as much as 20%, while 10% of companies plan to increase HR technology investment by more than 20%. Only 15% of companies plan to spend less on HR technology in the coming year.

“The findings show similar change drivers as last year, namely the need to improve HR efficiency and effectiveness. This is compounded change given considerable progress already made over the past year,” said Jonathan Lo, Regional Practice Leader - HR Service Delivery Asia Pacific, Towers Watson.

“Companies are seeing the value that smartphone and other consumer-grade technology brings to HR, with an increased appetite to make strategic investments that can adapt and grow with the business over time. Companies that are intentional about how they‎ engage with their managers and employees through HR technology and HR portals acknowledge it as an effective way to meet their intended objectives.”

Usage of Manager Self-Service Rising in Asia

Adoption rates in Asia Pacific for manager self-service climbed to 47% from 35% last year, still lagging Europe (53%) and North America (71%), but clearly showing signs of convergence with elsewhere in the world. In that context, usage of SaaS is on the rise. Manager self-service typically includes such work as performance reviews and leave approvals.

Alongside manager self-service, 78% of Asia Pacific organizations that have determined what type of solution they will adopt are considering SaaS to replace their current HR management system, with better functionality cited as their main expected benefit. In Asia Pacific, the main providers of SaaS are SAP (including SuccessFactors), followed by Oracle (including HCM Cloud) and Workday.

Increased adoption of cloud technology is noteworthy among the companies surveyed, particularly those in markets where the government has taken a more proactive approach to the development of cloud, such as in Japan, New Zealand, Australia, Singapore and Hong Kong[1].

“The survey results are in line with what we regularly hear from CEOs – that is, how can HR processes be made more efficient? Top executives are looking to develop strong HR functions that are focused and accountable, and produce measurable results. Technology is a key factor in transforming HR as it enables the processes to become more user-friendly, allows for increased mobility, and boosts productivity. As smart devices become an essential part of daily business life in Thailand, the opportunity exists for businesses to integrate easy-to-use and effective HR technology into their operations,” said Pichpajee Saichuae, Managing Director of Towers Watson Thailand.

For those companies in Asia Pacific planning to change their HR structure, more than half (54%) are seeking greater efficiencies, while just under half (45%) cite quality improvements as the rationale for change, the survey shows. More than a third of respondents (37%) cited a change of business strategy as the reason.

However, the survey finds that in Asia Pacific only one in five companies will be expanding the scope of their HR shared services during 2014 and 2015, well below companies globally where one third will expand in this area. Noteworthy too is that more Asia Pacific companies (14%) than elsewhere in the world (9%) are looking to decentralize their HR function, devolve to separate business units or geographies. It points to significant opportunities for companies in the region to invest in HR shared services or optimize existing service delivery model to gain an edge over competition.

“The survey found that one-in-ten Asia Pacific organizations don't have any standardized payroll sourcing strategy across locations – instead allowing each location to determine their own strategy,” said Lo. “That means about 10% of the companies surveyed are missing out on opportunities to realize operational efficiencies and effectiveness… small details perhaps, but they do matter in the increasingly competitive business environment we all operate in.”

Many HR Functions Remain Manual with Significant Optimization Opportunities

In Asia Pacific, internal and external recruiting, onboarding, compensation, career development, workforce planning and succession planning remain manual or paper-based for around half the companies surveyed. “So there are clearly opportunities to streamline and optimize these processes, integrate with Core HR systems to attain greater efficiencies,” said Lo.

“It also appears that companies are splitting their dollar investments between core HR systems, such as talent management and payroll, next-generation technology including HR data and analytics, and integrated talent management systems,” said Lo. “The survey shows very positive sentiment: 75% of organizations in the region currently have or will have an HR portal – 76% see it as an effective way to meet their objectives.”

The survey also found a continued increase in the use of SaaS systems for core HR and talent management technologies, further adoption of mobile technologies and utilization of HR portals. Nearly half of the respondents (46%) reported using mobile technologies for HR transactions, an increase from 36% in 2013. The survey noted that there is room for much growth, as only 10% are using mobile access for a majority of HR transactions. Meanwhile, 60% of employers have an HR portal in place, up from 53% in 2013. Another 20% are in the process of developing a portal. Additionally, the adoption of SaaS increased again this year, with 40% of respondents saying they are considering SaaS as their only solution.

Worldwide, for the second consecutive year, respondents identified streamlining their business processes as their key HR initiative. More than half (55%) of respondents said they reengineered key HR processes over the past 18 months, while roughly half (49%) improved line managers’ people management capabilities. About one-third (36%) implemented manager and employee self-service initiatives, while 31% refocused the role of their HR business partners.

“Organizations are narrowing their focus on HR initiatives as they seek to strike a balance among people, process and technology priorities. We attribute this shift to high-impact HR investments, such as streamlining business processes and implementing manager self-service, to a commitment towards running the HR function more like a business,” said Lo.


Latest Press Release

Country and sector risks worldwide: Some emerging economies become increasingly vulnerable

- Higher oil prices and continued capital outflows from emerging markets mark the third quarter of 2018 - A wave of sectorial downgrades in Turkey and Argentina - Risks improve in Central Europe and the CIS - Downgrades for Pakistan and Nicaragua,...

Late Autumn Gozen Lunch and Kaiseki Dinner at Yamazato Restaurant

As autumn begins to fade in Japan, the chefs at Michelin Plate restaurant Yamazato at The Okura Prestige Bangkok celebrate with special Gozen lunch and Kaiseki dinner featuring seasonal ingredients such as mackerel, momiji sea bream, chestnuts, and...

Latest state-of-the-art health check-up technology comes to Thailand

Verita Health MahaNakhon (VMH) is introducing "Verita Wisdom", a new 360° state-of-the-art Cardiometabolic Health Check to Thailand to analyze customers' cardiovascular risk situation within 30 minutes. "We are delighted to be able to exclusively...

Seaonal October Coconut Treats!

October is the most delicious time of the year for coconut and our inspired chefs have taken full advantage of its satisfyingly chewy texture and its uniquely sweet taste. Whether used raw, cooked or even preserved, coconut adds a special and delectable...

Heroes of Thailand debuts in Bangkok Song and music video pays tribute to the heroes - divers, rescue workers, officials and volunteers of the Wild Boars cave rescue

Today marks the official launch of Heroes of Thailand, a song and music video produced by Thailand-based British Executive Producer Will Robinson, to honor the sacrifice and efforts of the divers, rescue workers, officials and volunteers who rescued the...

Related Topics